The Right Way to Prepare Your Budget
While it is important to prepare a budget, the key to it is knowing how much you will be expected to spend. As an educator and financial adviser, Jonathan Osler San Francisco stresses the importance of budgeting your money wisely and planning for anything that might happen in your life.
There are two types of budgets; liquid and fixed. A liquid budget is a bank account where you put away enough money for monthly bills, taxes, and expenses. A fixed budget is one where you allocate money to cover your spending needs.
To make it easy for you, Osler suggests these tips that can be very beneficial in preparing this budget.
1. Always start by looking at your monthly income to know how much money you need to set aside for the month. The amount of money needed depends on several factors such as the number of people entitled to what kind of benefits, the total amount of expenses, and others. These expenses include insurance, rent, utilities, and food.
2. If you have the money left over, you can put it in a savings account to be used in an emergency. If an emergency suddenly happens, it won’t be that difficult to handle as you already have some money saved up.
3. Prepare a list of services you need to pay for to only pay for what is important to you each month. This will help you be more aware of how much money you need to set aside. If you find it difficult to pay for all the services, you might want to cut on a few of them so that you won’t lose too much in the end.
4. If you like to make impulsive purchases, it is important that you watch what you buy. They call it impulse buying because, during those times, we seem to forget about our budget and buy something we cannot afford at all. If you know that you like to spend money on things you don’t need, you might want to avoid stores for a while to lessen your temptation.
5. Prepare a budget in advance. If something happens in the future, such as an unexpected bill or loss of money, you will still be prepared for it. You don’t have to worry about being forced to pay for unexpected bills when you have already prepared everything beforehand. It is also important to know how much money you can spend on what. This will allow you to know how much money you can set aside every month to make it easier for you to manage your expenses.
6. If a sizable amount of money comes in, put it in your savings account immediately to use it the next time the situation arises. If you are using a fixed budget, you can adjust it to include the additional money.
7. If you want your budget to be successful and effective, you might want to include your expenses every week. This way, there is no way for it to fail.
8. Prepare a list of everything you need to spend on, such as your utilities and food, so you will only pay for what is important. You don’t want to spend all your money on items you don’t need.
Budgets are only effective if they are well-prepared. If you cannot prepare a solid budget, you might want to consider hiring a professional financial adviser who has the expertise and experience to handle budgets in proper ways.
By carefully planning and preparing your budget in advance, Jonathan Osler San Francisco thinks it will surely be more beneficial. You will no longer spend money on things you do not need or can’t use. You will save money for a better future and achieve the goals in your life.